I realized if something happends to either of them, I am without enough liquidity to survive my old age.
I wonder whether I can or should insure them for enough money to care for me in case something GOD FORBID happens to them.
This is new territory for me.
Your thoughts?
I always to a small amount through work.
You should look into human trafficking, I'm told they got tons of kids available.
Listening to Clark Howard, he always says that unless you are depending on their income, there is no need to insure them. In your case, you would need to replace their financial support in the event that you were to lose that support. Makes perfect sense to have enough to replace that support.
My parents purchased life insurance for me seventy some odd years ago. I still have it. It was very inexpensive.
Should you find yourself in such dire straits and I still live, I will find a way to see you are cared for.
I carried small policies for each of my children until we were financial well established. My thinking was that if any of my children were called home my wife and I would be able to provide an appropriate final service for them.
If I understand correctly, your retirement plan is sponging off your kids, dead or alive. That’s kind of weird IMO.
I did purchase life insurance on my son as soon as I legally could. Not for me but for him. It was a simple $25K policy that was paid in full in 10 years, which he can add to if he wishes. He is 24 now and the owner of that policy to do with as he wishes.
Why would I insure an expense?
Yes, consult a reputable agent for a reputable company for personal advice.
I bought whole life policies on my rugrats when each was under a year old. If they croaked before they left the nest, we had money to plant them in a marked grave. Thankfully they survived their youth and made it to adulthood. After graduation from college, and they where working, I turned the policies over to them. I told them they could cash them in for the current cash value and spend it on booze broads or a fast looking car, or they could keep up the premiums and always be assured they would have life insurance when needed. It was the cheapest insurance they would ever buy.
I bought $25,000 whole life insurance policies for each of my kids when they were born. Cost me about $15 per month each. By the time they were old enough to buy a house, I had $8000 for each one of their policies in cash value that they used as part of their down payment.
I found in my early 40s and YEARS after my mom’s death, that my mom had taken out a policy on me almost at birth.
I have worked in the life insurance field for 44 years.
I purchased 2 policies each (several years apart) on each of my 2 children for the purposes of (1) providing for cash, if needed, for their funerals, etc. (2) protecting their insurability, so they would have some insurance, even if their health deteriorated at a young age and (3) growing cash values, which might be used for a variety of uses (including to help fund my retirement, potentially).
The premiums on the oldest policies have been fully paid by policy dividends for maybe 10 years or more now, and the newer policies are almost to that point. The guaranteed cash values grow at guaranteed 4%, inside the policies (not taxable year to year).
If it seems I don’t need the values after I retire, I will transfer the ownership to the kids, and they can put their own spouses and/or children as beneficiaries. If either of them dies before I make that decision, I will share the death benefits with their spouses and/or children.
I don’t believe you should take out life insurance policies on children. God forbid if anything ever happened to them, who do you think would be the #1 suspect?
If one of them dies, you sell the property you are “holding” for him, and use the proceeds to support yourself. (Otherwise, you have to put out extra money for an insurance policy and that increases the amount your children need to give you now.) Isn’t that what most people would do? Or am I missing something?
We put burial policies on both kids shortly after they were born, and they have them now upon leaving the nest, paid up, for their use if they wish, or to cash them in for cash value. But we protected ourselves and gave then the opportunity use them for themselves. Not a traditional gift, but one just the same.
It is also an investment. By establishing that the burial would be covered, they don’t fall into the cost changes that will happen in their lifetime. We had a burial policy like it for my wife’s father, and the argument was brief about increased costs over his lifetime for a paid up policy 35 years before the death. As long as the insurance company exists, they are bound by it. It’s a good investment for you and the kids.
rwood
Take out insurance on one then take him/her out hunting or fishing.............just a thought.
The policy gives me some options (and my family).
1) If I die, my wife gets 310k tax free (250k + accumulated value of 60k) TAX FREE! (I also have 1mm policy TERM).
2) It has accumulated wealth and I could cash out NOW and get 60k (taxable)....so if I get a divorce I can either name a new beneficary or buy something stupid with 60k.
3) Also, it has accumulated enough value that its own dividends cover the premium (i don't pay anymore).
4) Also, I can borrow against its cash value of $60k (albeit at a rape-level rate of 8%)....but hey, credit is there!
Basically, it gives me OPTIONS. I dont need the money, I love my wife, and I don't plan on dying so I'll just let it grow for her.
I also bought a 1mm term policy from United Healthcare. Wife gets a flat 1mm from that policy TAX FREE, but I can't borrow against it and cant cash it in. Its for only when I croak.
As for my kids, I purchased the same policy for them. 250k whole 65-life. Still paying premiums on those! No one wants their kids to die, but we do buy them insurance for giving them OPTIONS. Its simply an investment option for their future spouses and will give them borrowing options in a couple of decades such as buying a house or for college if tough times hits.
Hope this helps.
From your post it seems like you need some sort of trust set up for you and maybe an annuity if you are suitable for it (I hate annuities and can do the same with different types of securities). Buying insurance for your kids to benefit you? You'll have to see if such a product exists and, again, if it is suitable for both your kids and you.
Take care.
Yes.
For instance:
If you have co-signed for a college loan your child’s death does not make it go away. Many a sad story of parents having the pain of a child’s death amplified by being stuck with their death.
Do what is right for you.